Bottom line
- Total investment $504K – $825K including a $35K franchise fee, 7.0% ongoing royalty.
- Average unit revenue of $1.2M/year (median $1.1M).
- Rated STRONG with a risk score of 54/100. SBA loan default rate of 0.0% across 16 loans (below the industry average).
Item 1 · who you're contracting with
The Franchisor
Yale framework · single-unit ROIC
Returns Analysis
Pulls Item 7 (investment) and Item 19 (revenue) from this brand's FDD into the Yale unlevered-ROIC formula. Override any input to stress-test it against your own assumptions.
The model · Yale framework
What would one Hurts Donut unit return on the cash you put in?
Unlevered ROIC · per unit
15%
Below typical band (30–60%)
Levered LBO scenario · Yale Crease Capital framing
What would 25 Hurts Donut units return on equity?
Equity IRR · 5-yr
49.9%
7.57× MOIC
Year-1 DSCR
1.88×
EBITDA ÷ debt service
Equity required
$464K
on $2.3M purchase
Total debt
$1.9M
SBA $1.2M + senior + seller note
Overview
About
Franchisees operate quick-service donut shops featuring Hurts Donut's specialty varieties, likely including production/baking, retail sales, and customer service. Day-to-day operations involve inventory management, staffing, quality control, peak-hour service (mornings), point-of-sale management, and adherence to brand standards across a small (16-unit) system.
Item 7 · what it costs
The Vitals
Item 19
Financial Performance
Item 20 · unit dynamics
The Growth Chart
Year-over-year franchised unit counts and net change. Source: FDD Item 20.
Item 20 · 28 states with active franchisees
The Territory Map
Derived from franchisee contact records. Shows states with at least one current operator — not where the franchisor is registered to sell new units (that data is re-extracting in a future refresh).
States derived from franchisee phone area codes (Item 20). Approximate — ported numbers may show the original state, not the franchisee's current location.
Government records
SBA Loan Data
Aggregated from SBA 7(a) loan disclosures, public data unique to FranchiseVerdict.
FranchiseVerdict rating + FDD Items 3, 5, 6, 12, 17
Risk & Legal
Contracting donut franchise with meaningful unit decline, opaque profitability metrics, and capital-intensive model relative to disclosed revenues creates elevated investment risk despite absence of litigation.
Score breakdown · what drove the 54 / 100 rating
- 01MEDSystem contracting sharply: 16 units with -16.7% YoY decline indicates potential franchisee dissatisfaction or unit closures
- 02MINORNo Item 19 net income disclosure despite $1.16M average revenue raises profitability transparency concerns
- 03MINORHigh investment-to-revenue ratio: $504k-$825k initial cost against ~$1.16M revenue suggests 6-12+ month breakeven timeline with no profit visibility
- 04MINORFranchise fee appears modest but royalty structure (7% of weekly gross) lacks context on actual net margins after COGS and labor
- 05MINORSmall system size (16 units) limits franchisor support infrastructure and negotiating power with suppliers
Severity inferred from the FDD text · not a regulatory classification
FDD Items 5, 6, 12, 17 · continued from Risk & Legal
Contract & Territory Detail
Item 11
Training & Operations
Item 20
Franchisee Contacts
Phone numbers extracted directly from this brand's FDD Item 20. After purchase, you'll also receive a list of validation questions tailored to this brand.
Franchisee contacts
40 numbers
One-time purchase · CSV download · Validation questions included
FDD download
Hurts Donut · FDD (2025) PDF